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Adam Crozier, the former chief executive of Royal Mail before taking the top job at ITV in April, and Archie Norman, formerly chief executive and chairman of Asda, yesterday unveil a five-year plan to transform the struggling Coronation Street broadcaster.

ITV

Following in the footsteps of previous ITV bosses Michael Grade and Charles Allen, who both previously carried out strategic reviews, Mr Crozier warned that the broadcaster can no longer survive on advertising alone and is wallowing in the wake of BSkyB.

While his predecessors bemoaned the growth of pay-TV, but failed to jump on the bandwagon, Mr Crozier set out plans to dip his "toe in the water" by signing a deal to show HD versions of ITV's digital channels on BSkyB's network.

High-definition (HD) versions of ITV2, ITV3 and ITV4 will be offered to Sky households from October, just in time to for spin-off shows of the X-Factor. The channels will form part of Sky's standard HD package. Standard versions of the channels will continue to be available free of charge via Freeview.

Mr Crozier refused to say how much ITV will collect from Sky for the rights to the HD versions of its less-popular channels, but said "the numbers add up".

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The 46-year old Scot, who dramatically quit as chief executive of the Football Association in 2002, said the HD deal was the most comprehensive he could seal just three months into the job, but said ITV was in talks with Sky and other pay-TV broadcasters, such as Virgin Media, about more extensive agreements. "This is absolutely [only] the first step into pay", he said.

Mr Norman, who made his name revitalising Asda, said: "It's a toe in the water, albeit a small toe in the water, but it's a profitable toe in the water."

Mr Crozier said only ITV1 was sacrosanct and would remain on terrestrial TV for the foreseeable future.

He said pay-TV formed just part of his "transformation plan" for "cultural and creative" change at ITV. He also promised a revamp of the broadcaster's below-par internet offering and a multi-million pound injection into the creation of new programming.

"For the past decade ITV has not faced up to the challenges presented by the rise of internet-based platforms, the continuing growth of pay-TV and subscription services and the globalisation of content," he said.

"Re-shaping the economics of ITV will require changes not only to the strategy but also to ITV's management, culture and organisation.

"ITV has said just about everything to someone at some time," he added. "There are still the same challenges as there were [before], and we have to face up to them."

Mr Crozier said ITV, which paid £175m to buy Friends Reunited in 2006 only to sell it for £25m three years later, is "not punching [its] weight online".

"ITV failed to equip itself to compete. ITV.com lags behind competitors in audience, functionality and revenue terms," he said. "We need to invest online – our site isn't as good as some of our competitors. User experience is not as good as it should be."

A significant amount of a new £75m three-year investment fund would be spent on online projects, and the company is exploring the possibility of introducing "micropayment" charges for internet catch-up services.

Mr Crozier said ITV.com will be revamped to become a "destination" website before the launch of the BBC-led Project Canvas internet TV service due to start next year. ITV will offer free and paid-for services via the Project Canvas platform, which aims to combine the diversity of internet content with the easy viewing of television.

The rest of the extra cash will be spent on creating new "fabulous drama and great light entertainment", such as X Factor, Come Dine With Me and Poirot.

Mr Crozier said the extra investment would not only create better content to screen on ITVs channels, but also allow ITV Studios, the company's production arm, to sell the new dramas and formats overseas.

ITV has attracted stinging criticism for its failure to own the rights to its biggest hits, such as X Factor, Britain's Got Talent and Who Wants To Be A Millionaire, which have proven extremely popular abroad. "They have been fantastic hits, but they could have made ITV pots of money if they'd owned them," a leading analyst said. "But they've given loads of money away - a lot of it to Simon Cowell."

Mr Crozier said ITV has its eyes on the $87bn (£54.6bn) international TV market, and he is determined to increase ITV's share beyond its current 3pc. However, he concedes that is likely to take at least 18 months to create new formats, which will then have to be a proven success here before they can be sold. "We can't make progress internationally, until we are progressing domestically," he added. He highlighted Come Dine With Me, the acerbicly-compered dinner-party series, which has been sold to 25 countries following its phenomenal success on Channel 4.

"The creativity process, which is clearly at the heart of the business, has not been working," Mr Crozier said. It will now he promised.

However, for all the gloss and polish, some analysts remained unconvinced. "ITV did try to get into pay-television 10 years ago, but ITV Digital collapsed and was withdrawn in 2002," said Toby Syfret, an analyst at Enders Analysis . He said the HD plan "gives [ITV] a little bit extra but doesn't solve the basic issues of looking at future revenues outside advertising."

Lorna Tilbian, an analyst at Numis, said: "Whatever, they do now is too little too late."

"The big opportunity was in the late 90s before Sky was so dominant and Google arrived.

"They didn't succeed all those years ago - It's going to be very hard now."

She speculated that given Mr Norman's record as a "turnaround king" the real plan might be to "fix it up around the edges" before selling the channel to BT or Virgin Media, which have both been speculated as potential bidders in the past.